EUROSTOXX50 TECHS: (H5) Approaching The All-Time High

• RES 4: 122.85 High Dec 12     
• RES 3: 121.43 High Dec 16  
• RES 2: 120.70 High Dec 20   
• RES 1: 118.30/119.49 High Jan 10 / 20-day EMA   
• PRICE: 117.32 @ Close Jan 14 
• SUP 1: 117.16 Low Jan 13          
• SUP 2: 116.59 76.4% retrace of the Jun - Dec ‘24 bull cycle (cont)
• SUP 3: 116.07 Low Jul 8 ‘24 (cont)
• SUP 4: 115.45 Low Jul 3 ‘24 (cont)     

The current bear cycle in BTP futures remains in play and the contract is trading closer to its recent lows. Price has breached support at 117.40, the Nov 7 low and a key level, strengthening the current bearish condition. This opens 116.59, a Fibonacci retracement. Initial firm resistance is seen at 119.49, the 20-day EMA. A recovery would be considered corrective and this would allow an oversold condition to unwind.

• RES 4: 92.88 High Jan 2 
• RES 3: 91.61 20-day EMA 
• RES 2: 91.58 High Jan 8 
• RES 1: 90.31 High Jan 9              
• PRICE: 89.25 @ Close Jan 14
• SUP 1: 88.96 Low Jan 13                             
• SUP 2: 88.87 2.764 proj of the Dec 20 -27 - Jan 2 price swing  
• SUP 3: 88.53 3.000 proj of the Dec 20 -27 - Jan 2 price swing
• SUP 4: 88.19 3.236 proj of the Dec 20 -27 - Jan 2 price swing

The trend condition in Gilt futures is unchanged, the direction remains down and last week’s fresh cycle lows reinforce current conditions. Recent weakness also highlights an acceleration of the trend. Sights are on 88.87 next, a Fibonacci projection. Initial resistance is at 90.31, the Jan 9 high. Resistance at the 20-day EMA, is at 91.61. The EMA is seen as an important hurdle for bulls.

Germany and Spain both still look to hold auctions this week. We also pencil in syndications from Austria, Ireland and France, although we may only get one or two of these this week with no countries holding syndications today with UK and US CPI upcoming – we will be looking out for mandates for these countries today as well as a possible RFP from the EFSF ahead of a potential transaction next week. The EU and Greece have already held syndications while Italy, the Netherlands and Germany have held auctions this week. We pencil in estimated gross issuance for the week at E51.3bln, down from E62.5bln last week.

• Today, Germany will return to the market to sell E1bln of the 1.80% Aug-53 Bund (ISIN: DE0001102614) alongside E1.5bln of the 30-year 2.50% Aug-54 Bund (ISIN: DE000BU2D004).
• Tomorrow, Spain will hold a Bono/Obli auction, to sell a combined E5.0-6.0bln of the on-the-run 2.70% Jan-30 Bono (ISIN: ES0000012O00), the 0.85% Jul-37 Obli (ISIN: ES0000012I24) and the 1.00% Oct-50 Obli (ISIN: ES0000012G00).

For more details on issuance this week and next week see the full document here: EZ250115.pdf